On Thursday, UBS initiated coverage on Mitra Adiperkasa (MAPI:IJ) (OTC: PMDKF) stock, a prominent lifestyle retailer in the ASEAN region, with a Buy rating and a price target of IDR1,850.00.
Mitra Adiperkasa, recognized for its significant presence in the sportswear retail segment and partnerships with global fashion apparel brands, is also a majority stakeholder in MAP Aktif (MAPA.JK), a leading ASEAN sportswear retailer, and MAP Boga (MAPB.JK), which operates food and beverage brands such as Starbucks (NASDAQ:SBUX) and Subway in Indonesia.
The company is anticipated to experience a compound annual growth rate (CAGR) of 14% in revenue from 2024 to 2026, propelled by mid-single digit same-store sales growth and the opening of new stores.
Despite a year-to-date decrease of 26% in share price, which may be attributed to concerns over the Indonesian rupiah's weakness, a consumer boycott of Starbucks, potential import tariffs on textiles, and increased operational expenses due to store expansion, UBS views these factors as likely temporary setbacks.
UBS's analysis suggests that Mitra Adiperkasa's stock currently appears undervalued, trading at 10 times consensus 12-month forward price-to-earnings (PE) and at a 48% discount to the average of its Indonesian retail peers. This is notably lower than the five-year average discount of 33%, which is underscored by the company's robust earnings growth potential.
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